Robert G. Nath
Over 30 Years'
IRS and State Tax
Robert G. Nath, PLLC
1775 Wiehle Avenue
Reston, VA 20190
Innocent Spouse Relief and Divorce
- What relief is available under the recent innocent spouse revisions?
The 1998 revisions to this law provided for three types of relief: (1) traditional innocent spouse, (2) separate liability election, and (3) equitable relief. Each of these has its own standards. All are difficult to meet in the real world. Traditional innocent spouse relief is potentially available where the IRS proposes more taxes and you claim you did not know about the taxable activities and other requirements are met. Separate liability election is available where spouses have separated or divorced and the IRS proposes additional taxes. Equitable relief is for cases that don't fit the first two, but where the circumstances are such that imposing liability would be unfair.
- Can I get "innocent spouse" relief if I divorce?
Sometimes, yes, but not simply because you have divorced. There are three types of relief: traditional innocent spouse, "separate liability" election, and "equitable relief." The first two of these require that the IRS has made an assessment of new or more taxes on your joint return. So if you filed a joint return and simply failed to pay the taxes due on that return, you are not legally eligible for the first two types of innocent spouse relief. That disqualification includes the "separate liability election" that is otherwise available to separated or divorced couples. The third type, "equitable relief," can be an avenue of relief, but it requires a demonstration that collection of the tax against you would be "inequitable" under all the circumstances. Generally, "inequitable" means "unfair." In the real world, the IRS is very careful about granting any such relief.
- My ex signed papers stating he would pay our back taxes (on a joint return). Why can't the IRS go after him/her?
The IRS will go after the easiest dollars first. If that means both of you, then IRS will seek collection from both. If only one is collectible, the IRS will seek that collection first. The property settlement agreement and/or the divorce decree do not bind the IRS, so the agency does not have to "obey" that decree or even pay attention to it. Joint returns create "joint and several" liability, meaning both of you are liable together, and separately, for all of the unpaid taxes attributable to that return.
- How do I apply for Innocent Spouse relief?
Use Forms 8857 and 12507, and consult the instructions in detail. Also obtain Publications 971 and 3512, and the IRS' short-hand for innocent spouse determinations, found at http://www.irs.gov/individuals/article/0,, id=96786,00.html. These sources will answer most questions and considerations on innocent spouse relief.
- What happens to my ex if I apply and obtain innocent spouse relief?
First, your ex will be notified by IRS that you have applied for relief. He or she will be given an opportunity to participate in your proceedings (limited to submitting information). Second, if your request is granted, you are relieved from the joint liability, but your ex still remains fully liable for any unpaid taxes, penalties and interest.
- Can I be "innocent" if I signed a joint return and the IRS has not proposed more taxes?
No. Under traditional innocent spouse rules, and also the "separate liability election" rules, you cannot avoid liability for taxes admitted to be due on a joint return. Only additional taxes the IRS proposes are subject to these rules. However, you can still apply for relief by presenting evidence to the IRS that would show it is "inequitable" to have you pay the joint taxes. All three types of "innocent spouse" relief are requested on one form, Form 8857.